“With regard to the Middle East, our outlook assumes a modest headwind tied to business impact in the region, and we'll continue to monitor the situation.”

In context

“ar-over-year general expense increases related to higher wage and purchase transportation rates and other inflationary factors. This is a $500 million improvement versus our December assumption, and we're pleased with our year-to-date cost reduction progress and now expect to exceed this year's $1 billion savings target. Our bridge also includes partial offsets to these items. Most remain unchanged from what we shared in December, except for the FedEx Freight and variable incentive compensation headwind. Now expect a $400 million decline in adjusted operating income at FedEx Freight compared to the $300 million expectation we shared in December. Additionally, we now expect variable incentive compensation to be an $800 million headwind, reflecting our commitment to rewarding our employees. With regard to the Middle East, our outlook assumes a modest headwind tied to business impact in the region, and we'll continue to monitor the situation. As a reminder, also embedded in our assumptions is the continued revenue and profit headwinds from global trade policy changes, which are more than offset by transformation-related savings. Turning to capital allocation. We're maintaining our disciplined approach to capital and are prioritizing capital toward reinvesting in the business, including Network 2.0 and returning cash to stockholders. Consistent with this approach, we're now anticipating FY '26 CapEx to be no more than $4.1 billion, down at least $400 million from the $4.5 billion forecast we provided in December. We also remain committed to bringing aircraft CapEx to $1 billion or below this fiscal year and through 2029. Our CapEx discipline, coupled with the higher adjusted operating income expectation supports further upside”